if credit purchases are 3600000 and cash purchase are 25% of total purchases find the cash flow of operating activities. rent paid is 150000 commission received is 250000
Answers
The cash flow of operating activities is -1100000
Explanation:
We know that
Cash purchase + credit purchase = Total purchase
25% + 75% = 100%
Since the credit purchase is 3600000 that is 75% value, but we have to find out the 25% so, it would be
= 3600000 × 25% ÷ 75%
= 1200000
Now the cash flow from operating activities is
Cash purchase = -1200000
Rent paid = -150000
Commission received = 250000
Net cash flow used by operating activities is -1100000
We assumed that rent paid and the commission received are done by cash so it would be considered in the computation part.
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If credit purchases are 2000000 and the cash purchases are 25% of total purchases. Find out cash flow from operating activities.
https://brainly.in/question/14602028
Explain the term operating activities on cash flow.
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Answer:
Assuming total purchase as x
credit purchase = Rs 36,00,000
cash purchase = 25% / 100
= .25x
Total purchase = cash purchase + credit purchase
x = .25x + 36,00,000
1x - .25x = 36,00,000
.75x = 36,00,000
x =36,00,000 * 100 / .75 * 100
x = 48,00,000
cash purchase = .25x
= .25x * 48,00,000
= 1,20,000
Therefore, Rent + commission - cash purchase
= 1,50,000 + 2,50,000 - 1,20,000
= 4,00,000 - 1,20,000
= 2,80,000